Production capacities for label papers will be extended at the Gratkorn mill “at the end of 2023”, Sappi said.

The “double-digit million-euro” investment in technological innovations, such as a new embossing calendar, will enable the mill to produce high quality wet-strength wet-glue label paper that is used in the beverage industry, for instance on returnable beer bottles.

Extensive technical innovations in the paper machine’s water and material cycles are also planned.

Marco Eikelenboom, CEO of Sappi Europe, said: “Our investment at Gratkorn underscores our strategy to establish Sappi as the leader within the label sector, adding to the supply of value adding products across our entire business.”

Sappi said it has invested recently in new technical equipment “and state-of-the-art production facilities” at Gratkorn, ranging from paper machines to formatting equipment, “and has transformed the production facility into a cutting-edge paper mill”.

Meanwhile, the company said it has temporarily reduced capacity at its Carmignano mill in Italy due to the continuing and sharp escalation of energy costs. The mill produces label and packaging grades.

“The energy crisis adds to the already high costs for raw materials and transportation, presenting an extraordinary challenge not only for Sappi but also the industry as a whole,” Sappi stated.

Sappi said its European sales team will be in further contact directly with customers to discuss the details of the implementation.

Sappi Europe is a division of Sappi Ltd (JSE), headquartered in Johannesburg, South Africa. Last month the business posted record Q3 results but flagged the ongoing energy crisis as a potential risk for its European business.